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Ukraine has to respond to Russia’s claim on debt before March 4


Ukraine has to respond to Russia’s claim on debt before March 4, after that the court is going to appoint a hearing, Russian Deputy Finance Minister Sergey Storchak told journalists on Thursday. “March 4 – is the first key date, when the Ukrainians need to respond to our claim. And then the court will have to appoint a hearing,” he said. Explaining the procedure, Storchak said, “We have presented a claim, they need to present some counter arguments. This is the usual procedure.” He noted that the total sum of the claim amounts to $3 bln, plus $75 mln of interest. Storchak noted that discussing measures of financial support for Belarus is in the agenda of Thursday’s visit of the Russian President Vladimir Putin to Minsk, but declined to talk about further details of possible aid. Russia-Ukraine debt litigation On February 17, the Russian Finance Ministry filed a lawsuit against Ukraine to London’s High Court of Justice for non-payment of the $3 bln loan. Ukraine was to pay the debt on December 21, 2015. On December 31, grace period to settle the dispute expired. The Russian Finance Ministry received no direct offers from Kiev. According to the Russian finance minister, Ukraine was not ready to negotiate settling the debt “in good faith”. “The lawsuit was filed after repeated unsuccessful attempts to encourage Ukraine to have a constructive dialogue on debt restructuring and to recognize the loan as official – so that it is regulated on better terms better than those proposed by Ukraine to its private creditors,” the minister said. The official added that a legal investigation of such dispute in court is a historic precedent on its own account, and “the fact that the debtor actions caused this is only regrettable.” On December 18, 2015, the Ukrainian government imposed a moratorium on payment of $3 bln debt to the Russian Federation because of Russia’s refusal to sign a restructuring agreement on an equal basis with private creditors, Ukrainian Prime Minister Arseniy Yatsenyuk said. According to Russia’s Economic Development Minister Alexey Ulyukayev, Ukraine’s decision to impose moratorium on payment of its debt to Russia was virtually a default announcement. In December 2013, Russian President Vladimir Putin and at the time Ukrainian President Viktor Yanukovych reached an agreement that Moscow would extend a $15 bln loan to Kiev through placing Ukrainian securities. Under the deal, bonds worth $3 bln were listed on the Irish Stock Exchange on December 20, 2013, and acquired by Russia using the funds from its National Welfare Fund. On December 17, 2015, the International Monetary Fund board recognized the official status of Russia’s loan to Ukraine, which meant that the sovereign borrower is under repayment obligations.
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